NatWest Improves Forecast and Commences Share Purchase Program
NatWest Group, the UK-based banking giant, has announced a robust financial performance for the first half of 2025. The bank posted an attributable profit of £2.5 billion, reflecting a solid growth and profitability in the period.
The bank's return on tangible equity stood at 18.1% for the first half of the year, with the common equity tier one ratio remaining steady at 13.6%. Zoe Gillespie, wealth manager at RBC Brewin Dolphin, commented that the bank's turnaround seems to be taking hold.
In terms of operational performance, NatWest Group delivered £2.9 billion of risk-weighted assets (RWA) management actions. The group's income (excluding notable items) is expected to exceed £16 billion over 2025.
The wealth and private banking arm, including Coutts, saw operating profit rise to £179 million. Assets under management increased to £51.8 billion, and improved cost/income ratios were reported. NatWest Markets Plc reported a profit of £89 million, driven by strong performances in Currencies and Capital Markets, despite increased operating expenses.
NatWest Group also announced a 9.5p interim dividend and a £750 million share buyback. However, specific details on share buybacks or government stake disposal were not provided in the available search results.
The bank's customer deposits (excluding central items) grew by £4.5 billion in the first half of 2025, with £2.4 billion attributed to the acquisition of Sainsbury's Bank.
Chief Executive Paul Thwaite stated that the group's strong performance in the first half of the year reflects consistent support for customers and delivery for shareholders. He also expressed that NatWest Group is well positioned to support economic growth across the UK and create sustainable value for all stakeholders.
As of Friday morning, the bank is trading at 510.80, marking a nearly 2% increase in value. The return on tangible equity of NatWest Group is expected to be greater than 16.5% for the entire year of 2025.
However, Russ Mould, investment director at AJ Bell, expressed caution about NatWest becoming too aggressive, given its history and the risk of unpicking progress in returning the bank to profitability. He also noted that the strong returns could come under scrutiny, with speculation that the government is considering a raid on the banking sector to bolster strained public finances.
Despite these concerns, the strong financial performance of NatWest Group in H1 2025 is a positive sign for the bank's future and the UK economy as a whole.
NatWest Group's wealth and private banking arm, which includes Coutts, reported an operating profit of £179 million and assets under management of £51.8 billion, showing growth and profitability in the first half of 2025. RBC Brewin Dolphin's Zoe Gillespie commented that the bank's turnaround appears to be taking hold, with the bank's return on tangible equity predicted to be over 16.5% for the entire year of 2025. Investors, like Russ Mould of AJ Bell, expressed cautious optimism about the bank's future and its potential impact on the UK economy, despite concerns about becoming too aggressive and the possibility of government intervention.
